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Before the NCLAT, another PRA contended that the application was allowed without issuing any notice to any of the Resolution Applicants, and only the Resolution Professional was heard
The National Company Law Tribunal has recently observed that there is no regulation under the law that requires a resolution professional (RP) to open the resolution plans in the presence of the Committee of Creditors (CoC) and Prospective Resolution Applicants (PRA).
“There is no regulation or law which provide that the Resolution Professional should open the plan in presence of CoC and PRAs. Learned counsel for the Respondent No.1 has been unable to show any provision of law which require that the Resolution Professional shall open the plan in presence of CoC and PRA,” the order reads.
The NCLAT bench, consisting of Chairperson Justice Ashok Bhushan, Judicial Member Justice Yogesh Khanna, and Technical Member Barun Mitra, heard an appeal against the order of NCLT recalling fresh bids from Prospective Resolution Applicants (PRAs).
One of the resolution applicants had approached the NCLT, claiming that the RP opened the plan submitted by the PRA in a sealed cover in the absence of the CoC and PRAs, which is against the regulations.
The resolution professional informed the NCLT that he opened the cover due to the non-availability of the password for the PRA.
However, the NCLT did not accept this contention and directed the RP to solicit fresh bids from all the PRAs and table them before the CoC.
Before the NCLAT, another PRA contended that the application was allowed without issuing any notice to any of the Resolution Applicants, and only the Resolution Professional was heard.
It was further submitted that the order passed by the Adjudicating Authority is contrary to the provisions of the Insolvency and Bankruptcy Code (I&B Code) and Corporate Insolvency Resolution Process (CIRP) Regulations.
The NCLAT agreed with the contention and set aside the order of the NCLT while allowing the appeal.
“Regulation 39 of the CIRP Regulations, 2016 also requires the Resolution Professional to look into the Resolution Plan submitted by the Applicants and to place the plan before CoC which is in compliance with Section 30(2). The opening of Resolution Plan by Resolution Professional is essential for further process in the CIRP. The Resolution Professional without opening the plan cannot come to any opinion whether the plan is complaint to Section 30(2) or not,” the order states
Case title: Shrinivas Spintex Pvt. Ltd vs Hinganghat Infrastructure Pvt. Ltd. & Ors.
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